My wife and I are just getting started in real estate investing and are looking for some initial cash-flow opportunities. My mother and father-in-law currently own a duplex that they rent out, weekly in the summer and monthly in the off-season. They do all the management tasks, such as finding tenants, collecting rent, and paying utilities for the weekly rentals. They are beginning to get burnt out on it and the responsibilities are cutting into their retirement time. They have started to discuss hiring a rental property management company to handle all the details for them, and they mentioned that the company would take a 20-25% cut.
I was talking with my wife and we thought that we could handle the management of the property for less than that, as she works part-time. However, I don't know what a traditional management company actually does, what services it provides, and what costs it passes on to the property owners. For example, if a pipe bursts and a plumber needs to come out, I assume the property owner pays for the repair, but the management company actually schedules and hires the plumber. What impetus does the management company have for finding the best value plumber? Are there any resources that describe what responsibilities a management company traditionally handles and what costs are covered by the company vs. being passed on to the property owner?
Thanks!
